In February 2021 the Financial Action Task Force (FATF) added the Cayman Islands to its list of jurisdictions under “increased monitoring” in the area of AML/ CFT (the “FATF List”). This listing occurred despite Cayman being considered as compliant or largely compliant in respect to 39 of the FATF’s 40 Recommendations and having completed 60 out of 63 FATF Recommended Actions. The Cayman Islands is now compliant or largely complaint with all of the FATF’s 40 Recommendations and is continuing to address strategic deficiencies in only two remaining “Recommended Actions” relating to (i) having effective sanctions for non-compliance with beneficial ownership requirements; and (ii) demonstrating effective prosecution of money laundering cases. It is these two areas which have been used as justifying the Cayman Islands’ addition to the EU AML List.
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Proposed Addition of the Cayman Islands to the EU’s High Risk Third Countries List (the “EU AML List”)